Correlation Between Odfjell SE and Wilh Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Odfjell SE and Wilh Wilhelmsen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Odfjell SE and Wilh Wilhelmsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell SE and Wilh Wilhelmsen Holding, you can compare the effects of market volatilities on Odfjell SE and Wilh Wilhelmsen and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Odfjell SE with a short position of Wilh Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell SE and Wilh Wilhelmsen.
Diversification Opportunities for Odfjell SE and Wilh Wilhelmsen
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Odfjell and Wilh is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell SE and Wilh Wilhelmsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilh Wilhelmsen Holding and Odfjell SE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Odfjell SE are associated (or correlated) with Wilh Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilh Wilhelmsen Holding has no effect on the direction of Odfjell SE i.e., Odfjell SE and Wilh Wilhelmsen go up and down completely randomly.
Pair Corralation between Odfjell SE and Wilh Wilhelmsen
Assuming the 90 days trading horizon Odfjell SE is expected to under-perform the Wilh Wilhelmsen. In addition to that, Odfjell SE is 1.38 times more volatile than Wilh Wilhelmsen Holding. It trades about -0.13 of its total potential returns per unit of risk. Wilh Wilhelmsen Holding is currently generating about 0.03 per unit of volatility. If you would invest 36,719 in Wilh Wilhelmsen Holding on September 1, 2024 and sell it today you would earn a total of 2,181 from holding Wilh Wilhelmsen Holding or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell SE vs. Wilh Wilhelmsen Holding
Performance |
| Timeline |
| Odfjell SE |
| Wilh Wilhelmsen Holding |
Odfjell SE and Wilh Wilhelmsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell SE and Wilh Wilhelmsen
The main advantage of trading using opposite Odfjell SE and Wilh Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell SE position performs unexpectedly, Wilh Wilhelmsen can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wilh Wilhelmsen will offset losses from the drop in Wilh Wilhelmsen's long position.| Odfjell SE vs. Stolt Nielsen Limited | Odfjell SE vs. Odfjell B | Odfjell SE vs. Wilh Wilhelmsen Holding | Odfjell SE vs. Frontline |
| Wilh Wilhelmsen vs. Wilh Wilhelmsen Holding | Wilh Wilhelmsen vs. Stolt Nielsen Limited | Wilh Wilhelmsen vs. Veidekke ASA | Wilh Wilhelmsen vs. Odfjell SE |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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